Whales May Not Survive Sakhalin Oil Operations, Panel Finds

GLAND, Switzerland, February 17, 2005 (ENS) - Only 100 western gray whales remain in the Pacific Ocean after the ravages of commercial whaling off Russia, Korea, and Japan between the 1890s and 1960s, and these few survivors are now confronted with a large oil and gas operation in their only known foraging ground, in the Sea of Okhotsk off the northeast coast of Sakhalin Island in the Russian Far East.

An independent study requested by the oil company, published Wednesday, finds that noise, ship collisions, oil and gas spills, and habitat destruction due to oil and gas development are the main threats to the whales' survival.

Even with no additional risks to the critically endangered whale population beyond those it faces now, there is some risk that the population will not recover, the study found.

Under the auspices of IUCN - The World Conservation Union, an independent scientific review panel was established to evaluate scientific aspects of western gray whale conservation in the context of Phase 2 of Sakhalin II, an integrated oil and gas project being developed by the Sakhalin Energy Investment Company under a production sharing agreement with the Russian Federation and its Sakhalin Oblast.

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A young western gray whale, Eschrichtius robustus, off the coast of Sakhalin Island, Russia (Photo by D. Weller courtesy NOAA)
Sakhalin Energy is a consortium of companies developing the oil and gas reserves. The shareholders are Shell Sakhalin Holdings, the operator of the project and holder of 55 percent of the shares; Mitsui Sakhalin Holdings, holder of 25 percent; and Diamond Gas Sakhalin, a Mitsubishi company, which holds 20 percent.

Phase 1 of Sakhalin II has been in production for six years, producing oil for six months each year during ice-free conditions. Phase 2 is intended to allow production of oil and gas year round, with production beginning in November 2007. It will mean construction of two new offshore platforms, offshore and onshore pipelines, and onshore processing and exporting facilities.

Based on the panel's report, Sakhalin Energy will determine the pipeline route for Phase 2 sometime within the next few months.

Sakhalin Energy’s CEO Ian Craig said, “We recognize the fragility of the western gray whale population and the potential threat to its survival from cumulative threats throughout their geographic range. This has led us to study the whales since 1997 and was instrumental in our decision to commission the panel and submit our own comprehensive and detailed scientific work to unprecedented public scrutiny.”

“Sakhalin Energy has taken a bold step in commissioning this independent review, drawing on the world’s best available scientific knowledge,” said IUCN Director General Achim Steiner. “This process also sets a precedent for how oil, gas and mining companies, and indeed the governments who license their developments, can use the best independent scientific knowledge to evaluate project plans and make decisions.”

The 14 member panel was headed by Dr. Randall Reeves of Canada, chairman of the IUCN Species Survival Commission Cetacean Specialist Group. It included Greg Donovan, head of science at the International Whaling Commission; Scientific Program Director for the U.S. Marine Mammal Commission Tim Ragen, and three Russian scientists including Alexander Vedenev from the Shirshov Institute of Oceanology, Russian Academy of Sciences, Moscow.

The panel was asked to determine whether the risks associated with the Sakhalin II Phase 2 project could be managed in an effective way, allowing oil and gas development to proceed without further jeopardizing the survival and recovery of the critically endangered western gray whale population.

Panel members were not asked to tell the company what to do, but rather to provide an analysis of issues and options based on scientific evidence.

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Panel chairman Dr. Randall Reeves photographed at a whale conference in Germany (Photo courtesy GSM)
Part of the evidence the panel considered was supplied by Sakhalin Energy, but the panel found such wide gaps in the company's information, that is was left with "considerable uncertainty over many aspects of risk evaluation and the efficacy of proposed mitigation measures."

For instance, the panel said Sakhalin Energy had not provided "a comprehensive, quantitative comparison of the three pipeline alternatives under consideration." The base case pipeline route poses additional risks because it crosses the southern portion of the primary whale foraging area and is near the mouth of Piltun Lagoon. The two proposed alternatives pass farther south and avoid that problem.

The only way to examine cumulative effects and risk, the panel said, was through population modeling under various assumptions of threats and their possible effects.

The western gray whale is known for long-distance migrations between low latitude calving and mating grounds near continental coasts and high-latitude feeding grounds in the Arctic and Subarctic. One key area is the summer feeding grounds off northeastern Sakhalin Island.

The panel's modeling exercise showed that the most serious threat facing the whales is fatalities. With only 23 reproductively active females, if only one female is killed per year "the probability of extinction of the population is high," the panel concluded.

The probability that ship strikes will contribute to such mortality increases because there will be more traffic and vessel activity associated with construction of a proposed oil platform and the platform-to-shore pipelines - as well as the traffic associated with Sakhalin I construction and operations.

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Sakhalin Phase 1 production is carried out at the Vityaz Production Complex, which is built around the Molikpaq production platform, pictured here. Oil is transported from the Molikpaq to a floating storage and offloading unit, then transferred to shuttle tankers for sale to customers. (Photo courtesy Sakhalin Energy)
The panel acknowledged that traffic near the nearshore feeding area should decrease with the end of construction and once the current tanker transport of oil has been replaced with pipelines, but noted that vessel support will be required for the two Sakhalin II platforms over the long term.

In addition, the risk of ship strikes on migrating gray whales at the southern end of Sakhalin Island "will certainly increase" as tankers begin moving oil and liquid natural gas from the new terminal at Prigorodnoye in Aniva Bay, the panel wrote.

"The most important lesson to be learned from this modeling exercise is that the anticipation and avoidance of potential risks to the population is essential," the panel said.

"Waiting for conclusive scientific proof that a particular activity or set of activities is having a population-level effect is not an appropriate approach for ensuring the conservation of this population. Action to prevent or mitigate risk needs to be taken based on the assumption that an impact will occur, until it is shown that it will not."

Craig said the company is prepared to take the panel's advice. "We accept this challenge and are confident that we can develop an acceptable way forward based on the application of a conservative risk management approach, as recommended by the panel," he said Wednesday.

But the company may not be willing to accept the panel's most conservative risk assessment. "The most precautionary approach would be to suspend present operations and delay further development of the oil and gas reserves in the vicinity of the gray whale feeding grounds off Sakhalin, and especially the critical nearshore feeding ground that is used preferentially by mothers and calves," the panel wrote.

If this is not deemed possible, the panel wrote, "risk management needs to be conservative with regard to western gray whales, particularly females with calves in the nearshore foraging area, and their feeding habitat, occupied from June to November.

"Cautious vessel operation in the presence of whales is essential, but likely not sufficient because collisions often occur before the whale is observed," said the panel. It recommends the use of no-entrance zones, ship traffic lanes, and mandatory reductions in speed to specified levels to increase the chances of whale survival.

Oil spill prevention is key to whale protection, the panel said, because the efficacy of response in the face of a major spill is limited because of the conditions in which a large spill is most likely occur - severe ocean conditions, storms, winter, ice - and the remoteness of the platforms and pipelines from possible response centers.

Suggestions for keeping oil out of the water include low-level leakage detection, rules for contractors, an oil spill response plan, the careful location of platforms and pipelines, the use of double-hulled tankers and the suspension of oil production at one of the platforms until the pipeline is in place.

The panel was "disappointed" at the "relatively superficial consideration" given by the company to keeping the whales' foraging areas off the eastern coast of Sakhalin Island "unspoiled and productive."

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Sakhalin Phase 1 oil exportation from the Vityaz Complex. Ship strikes can and do kill whales, the panel said. (Photo courtesy Sakhalin Energy)
Because physical disturbance of the seabed is "unavoidable as part of offshore oil and gas development," the panel said, siting considerations for platforms and pipelines should have been explored in detail with particular attention to the biological and ecological processes that create the nearshore foraging area in Piltun Lagoon.

"This was not done," the panel wrote. "Instead, the risks of damage to gray whale feeding habitat from development activities were dismissed as insignificant."

The panel suggested additional areas for future research such as continuous annual monitoring of abundance, trends, survival rates, reproductive rates, age and sex structure of the whale population.

Research should include annual monitoring of gray whale foraging and habitat use patterns and the recording and monitoring of whale-ship encounters to determine if adjustments are needed to vessel traffic based on ship size, location, speed, daylight and other variables.

Surveys should be undertaken at regular intervals during the open-water season along the eastern Sakhalin coast to detect stranded gray whales or floating carcasses, coupled with a serious effort to investigate the cause of death if a dead gray whale is found.

And there should be periodic monitoring of contaminant levels in the habitats exposed to potential and actual leaks and spills.

Looking at the larger picture, the panel recognized that threats to the western gray whale population do not arise solely from oil and gas development, nor are they limited to the Sakhalin region. The threats do not occur in isolation, but they are cumulative.

Current threats to these whales include occasional illegal harpooning and entanglement in fishing gear. Activities related to oil and gas exploration, including high-intensity geophysical seismic surveying and drilling operations, in addition to increased ship and air traffic, and oil spills, pose potential threats to the gray whales and their feeding habitat.

Most, if not all, western gray whales spend half the year elsewhere in eastern Asia, passing through waters within the economic zones of Japan, North and South Korea, and China.

Development and use of marine resources throughout the range of these whales, including offshore oil and gas, involves financial interests and technical support from Russia and other countries in eastern Asia, North America and Europe.

With this in mind, a comprehensive, international strategy is "essential" for saving this whale population, the panel said, while acknowleging that such a strategy is outside its realm of responsibility. Still, the panel expressed the hope that its work might provide a partial basis for development and oversight of such a strategy by an independent international organization.

The International Whaling Commission, among others, has called for urgent measures to protect this critically endangered species.

"The recommendations of the world's most respected whale scientists are clear and unequivocal," said William Eichbaum, WWF's vice president for endangered spaces. "If Shell routes this pipeline right through the heart of the whales' feeding grounds, it is potentially condemning them to extinction. We must not let an offshore oil platform become the tombstone of the western gray whale."

WWF, along with more than 50 other conservation and environmental groups, endorsed the panel's recommendation that Sakhalin Energy "suspend" operations. The groups are also urging a bank consortium led by the European Bank for Reconstruction and Development (EBRD) to withhold funds from the oil and gas development. The EBRD agreed last year that an environmental impact assessment conducted for the project had been inadequate.

"WWF is not against oil and gas development per se, but this project both poses unacceptably high environmental risks and brings too little economic benefit to the people of the region," said Igor Chestin, director of WWF-Russia. "Investors should think carefully about backing a project that puts shareholder value above human welfare and the survival of an endangered species."

The Sakhalin II project comprises the development of two fields – Piltun- Astokhskoye, primarily an oil field with associated gas, and Lunskoye, predominantly a gas field with associated condensate. The proposed development involves installation of offshore platforms on the Piltun-Astoskhskoye field and the Lunskoye field and linking both to the shore by offshore pipelines.

Links to the panel's report in English and Russian are found at: http://www.iucn.org/themes/business/isrp/index.htm#PAN

More information about Sakhalin Energy Investment Company can be found at: www.sakhalinenergy.com